***************************************************

The Executive Council has approved that the Civil Service Provident Fund (CSPF) Scheme should be set up under the Mandatory Provident Fund Schemes Ordinance to facilitate the exchange of talent with the private sector, and to provide a structured career framework for those who continue to contribute their best to the civil service.

"Our target is to implement the Scheme, as the only retirement benefits system for officers who joined the civil service since June 2000 and when they progress onto permanent terms, by early 2003. Serving officers on permanent and pensionable terms of appointment will not be provided with an option for transfer to the CSPF," the Secretary for the Civil Service, Mr Joseph W P Wong, said today (July 10).

These recruits will be covered by a Mandatory Provident Fund Scheme when they are serving on probationary or agreement terms.

Mr Wong said: "Views and suggestions received during the public consultation period between 16 January and 30 April this year have been carefully deliberated in the light of our objectives in introducing the CSPF Scheme."

Under the CSPF Scheme, the Government's contributions, including the mandatory and the voluntary contributions, will be based on a progressive contribution rates schedule starting from five per cent and increasing up to 25 per cent of the basic salary in accordance with the length of service of an officer. The Government will further discuss with the Staff Sides on the progressive contribution rates schedule within this range.

Disciplined staff will receive, in addition, a Special Disciplined Services Contribution SDSC at 2.5 per cent of the basic salary, in recognition of their earlier retirement age (age 55 for most) as compared with the civilian staff (age 60).

Vesting of the accrued benefits due to voluntary contributions will be 100 per cent upon completion of 10 years of service, and zero per cent in the interim.

The accrued benefits due to the SDSC will be 100 per cent vested in the officer on reaching age 55 and zero per cent in the interim. This will enhance the retention effect of the SDSC.

The level of benefits to be provided under the CSPF Scheme, including the mandatory, the voluntary and the SDSC contributions, will be kept within the ceiling of 18 per cent of the payroll.

"This is comparable to the best schemes in the private sector. We believe the Scheme features will be able to ensure that the civil service career remains sufficiently attractive and conducive to retaining quality staff."

"The rules of the CSPF Scheme will contain provisions to empower the Government to withhold payment of the accrued benefits attributable to Government's voluntary contributions, including the SDSC, where an officer is subject to investigations relating to misconduct, and to forfeit wholly or in part the accrued benefits when an officer is awarded a punishment of removal from office after due disciplinary process," Mr Wong said.

Following the approval of the design principles of the SCPF Scheme by the Executive Council, Mr Wong said: "We will continue our discussion with the Staff Sides on the detailed design of the Scheme as we work with the consultants on the implementation plans."

END/Tuesday, July 10, 2001

NNNN